This matter is before the court on the plaintiff's objection, Filing No. 115, to the magistrate judge's order, Filing No. 111, in connection with the plaintiff's motions to compel subpoenas on FIA Card Servs., Inc., N.A. ("FIA") and Trak America BOA FIA NE ("Trak America") and awarding payment of expenses to defendants as a sanction in connection with the plaintiff's motions to compel. See Jenkins v. Pech, 2015 WL 728305 (D. Neb., Feb. 19, 2015).

This is a class action for violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. ("FDCPA") and the Nebraska Consumer Protection Act, Neb. Rev. Stat. §§ 59-1601 to 59-1623 ("NCPA").[1] The facts are set out in the magistrate judge's Findings and Recommendation (F&R), Filing No. 110, the magistrate judge's order denying the motion to compel, Filing No. 111, and this court's order on class certification, Filing No. 135, and need not be repeated here. Briefly, the plaintiff challenges a form debt collection letter sent by defendants (an attorney and law firm) to approximately 560 Nebraskans. The defendants contest liability on the ground, inter alia, that the debts at issue are not consumer debts.

Plaintiff Lee A. Jenkins (hereinafter, "the named plaintiff") objects to the denial of the motion to compel and the imposition of sanctions. The magistrate judge found Jenkins had not explained how the requested documents would help differentiate personal from business debts, noting that an account record or credit-card statement showing that an individual made a purchase would not definitively identify the charge as a personal or business expense. See Filing No. 111, Order at 5-6. Further, the magistrate judge found the records minimally relevant, and found the relevance outweighed by the privacy interests of the cardholders. Id. at 6. The magistrate judge also noted that Jenkins had not identified FIA Card Services and Trak America or shown that the companies would have the requested records. Id. at 6 & n.2. Further, the magistrate judge found that Jenkins could obtain the contact information from the defendants and ask the 560 putative class members for their credit card records. Id. at 6. The magistrate judge also awarded the defendants their fees and expenses in responding to the motion as a sanction under Fed.R.Civ.P. 37, finding that Jenkins's failure to address the relevance of the sought-after discovery justified the award. Id. at 9.[2]

The named plaintiff contends his motion to compel was substantially justified. Jenkins has shown that, after consultation with defendants' counsel with respect to the assertion that the original request was overly broad and burdensome, he agreed to limit the subpoena request to the 560 Nebraska putative class members disclosed by defendants as recipients of the allegedly offending letters.[3] Jenkins argues the credit card account information is relevant and necessary to respond to the defendant's persistent assertions that the plaintiff cannot show the obligations at issue were incurred for personal or household, rather than business, expenses. Further, he argues that privacy concerns can be obviated by the protective order issued in this case, and by appropriate redaction.[4] See Filing No. 30, Protective Order.

A magistrate judge's authority over nondispositive pretrial matters is governed by 28 U.S.C. § 636(b)(1)(A). Gomez v. United States, 490 U.S. 858, 873-74 (1989); see also Fed.R.Civ.P. 72(a). On review of a decision of the magistrate judge on a nondispositive matter, the district court may set aside any part of the magistrate judge's order that it finds is clearly erroneous or contrary to law. 28 U.S.C. § 636 (b)(1)(A); Fed.R.Civ.P. 72(a); see Ferguson v. United States, 484 F.3d 1068, 1076 (8th Cir. 2007). ("A district court may reconsider a magistrate judge's ruling on nondispositive pretrial matters where it has been shown that the ruling is clearly erroneous or contrary to law.").

A decision is "clearly erroneous' when, although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." Chakales v. Commissioner of Internal Revenue, 79 F.3d 726, 728 (8th Cir. 1996); see Ferguson, 484 F.3d at 1076. "Under a contrary to law standard, a district court can reverse a magistrate judge's order only if the order fails to apply the relevant law." Brooks v. Lincoln Nat'l Life Ins. Co., No. 8:05CV118, 2006 WL 2487937, at *3 (D. Neb. Aug. 25, 2006). A magistrate is afforded broad discretion in the resolution of nondispositive discovery disputes. See Sheets v. Butera, 389 F.3d 772, 780 (8th Cir. 2004) (stating that review of questions concerning discovery matters is very deferential).

With due respect, the court finds the magistrate judge clearly erred in sustaining defendant's objections to the motion to compel and in awarding sanctions. The record shows the defendant has vigorously and consistently argued that the personal/business expense distinction may bar some or all of plaintiff's and plaintiff class's claims. Defendant opposed the plaintiff's motion for class certification on that basis. See Filing No. 48, Brief in opposition at 12-24. In fact, defendant criticized the plaintiff's failure to seek discovery or present evidence of the records of the original creditors, which, it argued, would show how and why the class members incurred the debts at issue. Id. at 13-14; see also Filing No. 83-2. Defendant then objected to the magistrate's F&R recommending class certification, arguing that the class could not be ascertained because of uncertainty as to the nature of the debt. See Filing No. 114-1, Defendants' Brief at 2 ("There is no evidence showing that recipients of the challenged letter incurred a debt' subject to the FDCPA."). At depositions, witnesses were questioned extensively on the nature of the debt. See, e.g., Filing No. 79-2, Index of Evid., Ex. 1, Declaration of William Reinbrecht ("Reinbrecht Decl."), Ex.1A, Deposition of Christopher Pech ("Pech Dep.") at 80-83; id., Ex.3A, Deposition of Tyler Grimm ("Grimm Dep.") at 41-42; id., Ex.1G, Deposition of Lee A. Jenkins ("Jenkins Dep.") at 59-61.

The court further disagrees with the magistrate judge's conclusion that because "the production of account records will not definitively identify the charge as a business or personal expense, " they need not be produced. Evidence need not be definitive to be relevant. The plaintiff has shown the evidence will at least be probative of the issue. The court finds credit-card account records are relevant to counter the defendant's asserted defense that debts at issue are not within the ambit of the FDCPA. As long as defendants continue to assert that defense, the underlying documents are relevant. Further, the court finds that it would be unduly burdensome on the named plaintiff to obtain such records from putative class members, who may not have retained such records, whereas the defendant law firm and its credit-card processing client are highly automated entities with capabilities to generate and obtain information by running queries in their computer systems. See Filing No. 79-2, Ex. 1, Reinbrecht Decl., Ex. 1A, Pech Dep. at 87, 168.

The court agrees with the plaintiff that the defendant cannot have it both ways. Defendants cannot oppose class certification on the basis that the named plaintiff and putative class members cannot show the underlying debt are for personal or household expenses and simultaneously object to a subpoena for those records being served on its client and the custodian of the records of the credit-card debts at issue. Notably, the record shows that FIA is Bank of America's credit-card processing arm and the defendants' client. See Filing No. 79-18, Ex. 1, Reinbrecht Decl., Ex. 3A, Grimm Dep. at 34-35; Id., Filing No. 79-13, Jenkins dep. at 68; Filing No. 135, Memorandum and Order at 4 n.4, 18. The letters at issue are aimed at collection on FIA accounts. Id. Defendant Pech testified that he could obtain the statements by merely asking the client. Filing No. 79-2, Index of Evid., Ex.1A, Pech Dep. at 80-81; Ex.3A, Grimm Dep. at 41-42.

Although the court assumes Trak America BOA is another entity owned or controlled by Bank of America, there is no evidence with respect to that entity in the record. The plaintiff will need to provide the court with more information as to the identity and position of Trak America vis-à-vis the controversy in this case before any subpoena will issue.

Because the court finds the named plaintiff's position in moving to compel the subpoenas was substantially justified in light of the defendants' continued reliance on the business debt/personal or household debt distinction, the court finds awarding sanctions is not appropriate. Accordingly,

2. The order of the magistrate judge (Filing No. 111) is affirmed in part and reversed in part, as set forth in this order.

3. The named plaintiff's motion to compel the subpoena of records in the possession of FIA Card Services (Filing No. 81) is granted.

4. The named plaintiff's motion to compel the subpoena of records in the possession of Trak America (Filing No. 93) is denied without prejudice to reassertion on a proper showing of that entity's connection to this case.

5. The magistrate judge's award of expenses as a sanction (Filing No. 111) and order approving the parties' stipulation (Filing No. 120) are hereby vacated.

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